A Pandemic Is Not the Time for Spotify to Undercut Artist Pay

Spotify's revenue is up, but it introduced a new deal where artists can opt for lower pay in exchange for promotion in its algorithm.  (iStock)

In the latest phase of the music industry’s race to the bottom, Spotify announced last week that it would give artists more visibility in its algorithm in exchange for reduced royalty payments. Those would be even lower than the current rate, which is about a third of a cent per play. The tradeoff follows a decades-long trend affecting virtually all American industries: the devaluation of workers.

If the pandemic has shown us one thing, it’s that we need art to keep us going. When we needed a bit of joy—or motivation or commiseration—during this horrific year, our favorite songs have been there. Yet the people creating music we love, with the exception of the industry’s top stars, are struggling to make a living as the concert industry flounders during COVID-19. Now is not the time for Spotify to use independent artists’ eagerness to get noticed to lower their earnings even further.

Since the music industry shifted its profit model from recorded music to touring and merchandise, there’s been less incentive for labels or individual artists to spend time on labor-intensive projects. Singles have taken precedence over albums, and the success of artists like 24kGoldn, ppcocaine and Stunna Girl on TikTok have proven that a catchy 30-second snippet is a much more efficient and effective way to become popular than writing a longwinded opus.

Talent and substance are still needed to keep an audience’s attention after going viral. But the financial endgame now (at least, pre-pandemic) is not to make money from recorded music, but to use music as a promotional tool to sell concert tickets and merchandise, secure brand collaborations and appearance fees, and earn enough money to enter more lucrative businesses—such as investing in real estate, which is many artists’ path to long-term financial security.

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Very few artists get that lucky. The music industry has always been seen as a labor of love, and fair compensation isn’t guaranteed or expected. But those attitudes are changing because the pandemic is putting independent artists in dire financial straits. In previous years, they were able to deal with recorded music becoming effectively worthless by making money from touring. Now that’s off the table. And with the passage of Prop. 22 in California, gig companies that artists often turn to for side work are now legally allowed to pay them below minimum wage and deny sick leave and even death benefits if they happen to catch COVID-19 on the job. America has shown once again that it would rather people work themselves into their literal graves than pay fairly or provide basic social safety nets.

Music is work—valuable work, as rising streaming numbers during the pandemic have shown—and artists are organizing. The Union of Musicians is demanding Spotify pay a penny per stream. (That even this number is currently out of reach says a lot about how low the bar is.) Realizing its cultural innovation is getting priced out along with its creative class, San Francisco announced plans to experiment with universal basic income for artists in 2021. And many artists here are supplementing dismal streaming income with grants from foundations that fund creative projects.

Against the backdrop of the pandemic, Spotify reported a $2.29 billion revenue in the third financial quarter of this year alone (up 14% from the same period last year), and Sony and Universal’s revenues are up in Q3 2020 as well.

There’s clearly money in music—it’s just not trickling down to artists.